City centre land market saturated

The current situation with the land market in the centre of Vientiane has seen it become quite saturated but in the suburbs sellers are still able to find some buyers, experts have noted.

Managing Director of RentsBuy Co., Ltd. Mr Houmphan Xaiyalath told Vientiane Times this week that two or three years ago, businesses from Laos and overseas bought land in prime locations, causing the cost of land to rise considerably.

The price of land offered for sale is still high which discourages other people from purchasing it for business activities. For instance, one land plot along Samsenthai Road is up for sale at the optimistic price of US$4,000 (about 32 million kip) per square metre.

Mr Houmphan observed that ‘land for sale' signs have been erected for years but most landlords are still unable to find buyers.

“I think the land market in prime locations is saturated,” he said, saying that there is land for sale but no buyers due to the very high prices demanded.

Mr Houmphan said the trend for 2016 is that more people are looking to buy small plots of land with road access. One of the most important things is that landlords are now allowing buyers to make payments in installments.

These kinds of land allocation projects are being carried out in areas such as the 450 Year Road, Km 21, Km 32 and Road No. 10 towards Tha-ngone village, where the government has shifted its development focus.

An official from the Vientiane Department of Natural Resources and Environment, who asked not to be named, said several land allocation projects are being developed in the government's focal development areas.

“The price of land under allocated projects is not high, ranging from between 90,000 kip and 225,300 kip per square metre,” he said.

Many people have bought these kinds of plots because they are not prohibitively expensive.

Of course some people buy land in the suburbs for speculation with the aim of making a profit later on.

But those who offer land for sale without the allocation of plots, road access or allowing payment in installments may struggle to make a sale because people are not interested in buying it.

One resident of Phonsa-ard village in Xaysettha district, Mr Tock, said he couldn't afford to buy a land plot in the city centre because it was too expensive, so he decided to build a house in Tha-ngone village despite the fact that it was a long way from his workplace.

Generally the land market in Laos is not developing as anticipated.

The sluggishness of the market has been observed since the government encountered budgetary tensions two or three years ago.

The slowdown may also be linked to the country's lower economic growth, which was recorded at 7.5 percent this year. In 2013, the Lao economy grew by 8.3 percent.

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